Before a jury found Manuel Asensio had illegally defamed a company whose demise he would profit from, and before securities regulators barred him from employment in the banking industry for the rest of his life, he used to take down companies with savage reports under the banner of his investment bank, Asensio & Company.

Then, as an “activist” short seller, he would compile damning research on a business, take a market bet its stock would go down, publish his report, and profit when it did go down.

Nowadays, Asensio is the director of the Alliance for Economic Stability (AES), a non-profit organization lobbying the Education Department on for-profit or “career” colleges, one of a group of short sellers who have teamed up with the Obama administration and a slew of left wing interest groups to push for strict regulations of the sector.

Documents obtained by The Daily Caller show Asensio’s group lobbied the agency vigorously with the benefit of surprisingly intimate knowledge of a federal government investigation into one specific firm, Bridgepoint Education, Inc.

For instance, e-mails from Asensio’s group indicate he possessed, or at least knew a great deal about, a draft audit of Bridgepoint by the Education Department’s Office of Inspector General (OIG) that had not been released to the public — or even to Bridgepoint.

The name of the sender of these e-mails is redacted. But one e-mail to Education Department officials from April 28, 2010 says, “I am with AES (eally.org) …. the methods you used for identifying the size of the illegal incentive compensation at Bridgepoint are deficient. The information you have provided is incomplete and grossly underestimates the severity and frequency of Bridgepoint’s violations.”

The e-mails specify Asensio’s group is referring to the Education Department’s “5 years old [sic] investigation into Ashford,” Bridgepoint’s preeminent campus in the home state of the chairman of the Senate education committee, Iowa Sen. Tom Harkin.

It’s important that Asesnsio’s group possessed such detailed information – and critiques – about the draft audit of Bridgepoint because in late April 2010, the Education Department had not yet provided that draft to Bridgepoint, the firm being investigated.

The revelations also come on the heels of charges by Oklahoma Republican Sen. Tom Coburn that Education Department officials were “tipping hedge funds” with inside information, allowing them to take trading positions ahead of the market. Doing so, Coburn said at a Senate hearing last week, “is highly unethical and if proven to be the case, some people ought to be going to jail in the Department of Education.”

The Education Department’s Office of Inspector General is part of the agency but, under the Inspector General Act, independent from it.

Other documents show that roughly a month after Asensio’s group lobbied the Education Department on the methodology of its draft audit of Bridgepoint, Harkin requested a copy of the draft audit or a briefing on its contents — but was rebuffed.

After Harkin staffer Robin Juliano asked for a copy of the audit, Education Department officials told her “we could provide the briefing but it would be better to do after we received the auditee’s [Bridgepoint's] comments on our draft report.” The staffer agreed, according to a summary of communications between the Education Department and Harkin’s staff provided by the agency pursuant to a Freedom of Information Act (FOIA) request.

The audit was not finalized and issued until almost a year later, on January 21, 2011. Since its release, Bridgepoint’s stock has risen 4.5 percent.

Bridgepoint is part of the $33 billion for-profit education industry that faces a push by the Education Department for strict new regulations.

Critics of the schools say they trick unprepared students into enrolling with false promises of high wages from the jobs they’ll get after graduation.

Industry representatives say the charges are overblown and warn the regulations will decimate the sector, rather than reform it.

The most contentious new rule, known as “gainful employment,” is still being finalized at the Education Department. Thursday, Harkin is holding a hearing on Bridgepoint: “a case study in for-profit education and oversight.”

The documents released under FOIA were provided to The Daily Caller by advocates for the for-profit college industry.

Meet Manuel Asensio

Asensio has a checkered past from his former career as an aggressive Wall Street short seller.

According to a 2004 decision by the U.S. Court of Appeals for the Fourth Circuit, in 1998, Asensio took big short positions on a medical device maker, Chromatics Color Sciences International (CCSI), that had just received a patent and government approval for a new device. Shortly afterward, he issued seven reports under the banner of Asensio & Company claiming the device had little commercial potential.

CCSI’s contractors backed out and the company’s stock plummeted, and Asensio made a big payday.

Following Asensio’s short seller takedown, CCSI sued, and a jury found Asensio had illegally defamed the company whose demise he profited from. The jury, however, awarded CCSI zero dollars in damages. The company made a comeback in 1999 but had no value by 2001, the court decision notes.

Reached by phone Wednesday, Asensio promised to “call right back,” but didn’t. However, in a combative court deposition in 2002 he vehemently denied wrongdoing. CCSI “are criminals,” the true perpetrators of fraud, he claimed.

In 2006, following a series of sanctions, securities regulators debarred Asensio from employment as an investment banker for the rest of his life for refusing to answer questions and provide documents about his investment practices.

In 2010, the Financial Industry Regulatory Authority (FINRA) declined a request by Asensio to associate with an investment firm, ISI Capital, saying his “re-entry into the securities industry at this time would pose a serious risk to the investing public.” The Securities and Exchange Commission agreed, denying Asensio’s appeal.

Notably, at least two investment firms, including ISI Capital, reside on the same floor of the same building as Asensio’s non-profit group that lobbies the Education Department.

The other investment firm located on the 25th floor of 747 Third Avenue in New York City is Mill Rock Investment Advisors. On Wednesday, TheDC called Mill Rock’s phone number and was patched through to Asensio.

Asensio’s tactics have provoked hatred from some. One anonymous author put up the website AsensioExposed.com, which catalogs his many foibles and run-ins with the law. The site has not been updated since 2008 and does not appear connected to the for-profit education fight.

Asensio lobbies the Education Department

In documents obtained by TheDC, Asensio’s non-profit group lobbied the Education Department vigorously in desperate-sounding e-mails rife with typos, as well as in a series of letters to top agency officials and key lawmakers.

Apparently referencing a phone call from that same day, a person from Asensio’s group said in an April 28, 2010 e-mail, “We spoke earlier today….I certainly hope you were acting when you made it seem as if you didn’t know anything about DOE’s 5 years old [sic] investigation into Ashford,” Bridgepoint’s premiere campus. “It would be scandalous if you didnt [sic]. This matter is too serious for acting and AES is very concerning [sic] about how you handled the call.”

Education Department officials, part of the agency’s Office of Inspector General (OIG), which was conducting the audit of Bridgepoint, seemed confused.

One person, whose name is redacted, forwarded the e-mail from Asensio’s group and asked, “Does your office/region have anything regarding Bridgepoint/Ashford University online (see below)? I spoke with this guy yesterday and he was adamant I am investigating this agency. The only reason I am checking with you is that he called me from a New York number.”

Later, on May 4, 2010, an Education Department official forwarded several e-mails from someone in Asensio’s organization and said, “Here’s the latest from [redacted].”

Other e-mails show an Education Department official in the OIG’s Long Beach, Calif. office told the person from Asensio’s organization to call the agency’s information hotline to provide what he had on Bridgepoint.

During the time period in which these e-mails were sent, Bridgepoint’s stock was rising steeply after rebounding from rumors that the Education Department’s audit would prove disastrous for the company. Someone who had shorted the firm would have been deeply, and increasingly, under water.

A person from AES also sent a series of letters to Education Department Sec. Arne Duncan over the summer of 2010 charging Bridgepoint with malfeasance.

On one occasion, Duncan’s office forwarded the “complaint” from AES to underlings. At the agency, most correspondence to Duncan is routed to the appropriate place through the executive secretary.

“Today I was given controlled document from the Office of Secretary (OS) transmitting a complaint from Alliance for Economic Stability, Inc. (AES). The complaint requests an investigation of Bridgeport Education, Inc., operator of Ashford University….Have you received the complaint? If not, I would like to forward a copy to you for review and referral recommendation. The due date to OS is June 1st,” wrote Carmen Dupree, an employee at the Education Department, in a May 26, 2010 e-mail.

Reached by phone Wednesday, Dupree declined to comment. Justin Hamilton, a spokesman for the Education Department, said “We have been committed to integrity and transparency and are very proud of the process we’ve put in place in our efforts to help protect students and taxpayers.”

Ed. note: Asensio’s debarment was issued by FINRA and prevents him from associating with a FINRA-registered firm. The matter is under appeal.